REA reports big profit increase

REA reports big profit increase

Profit
08 February 2016 by Nick Bendel 0 comments

REA Group’s relentless growth shows no sign of slowing, with the company delivering another strong set of results.

REA Group reported a net profit of $121.0 million for the six months to 31 December 2015, which marked a 27.8 per cent increase on the year before.

The group’s core revenue rose 20.4 per cent to $314.8 million, while Australian revenue jumped 22.4 per cent to $289.4 million.

At the same time, operating expenses climbed only 10.2 per cent, to $128.9 million.

Monthly visits to realestate.com.au increased 26.5 per cent to 42.0 million, while the portal featured 95 per cent of Australian residential property listings.

REA Group also revealed agent numbers increased seven per cent, but it did not disclose how many agents list on realestate.com.au.

Chief executive Tracey Fellows said she was pleased with the half-yearly results, which she attributed partly to the “exceptional value” REA Group offers agents and consumers.

“Our audience continues to grow as we innovate and deliver even better experiences for our consumers,” Ms Fellows said.

The half-yearly results did not include REA Group’s $578 million acquisition of portal business iProperty Group, which is scheduled to take effect on February 16.

REA Group’s results reflect a pattern of ongoing growth. In the past four years, core revenue has risen 133.9 per cent, from $134.6 million to $314.8 million, while net profit rose 194.4 per cent, from $41.1 million to $121.0 million.

REA Group’s growth strategy is focused on three areas: digital development, diversifying into adjacent markets and international expansion.

Australia delivered 91.9 per cent of REA Group’s core revenue in the first six months of 2015/16, compared to 90.4 per cent the year before.

The iProperty acquisition is likely to reduce Australia’s share of group revenue, given that iProperty is based in Malaysia and also does business in Singapore, Hong Kong, Macau, Indonesia, India, Thailand and the Philippines.

REA Group also has portals aimed at consumers in China, the US, Italy, France, Germany and Luxembourg.

[Related: REA takeover target growing strongly]

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